Full opinion text
MEMORANDUM OPINION CHASANOW, District Judge. Presently pending and ready for resolution in this copyright infringement action are (1) Plaintiffs’ motion and Defendant’s cross-motion for summary judgment on the safe harbor defense under the Digital Millennium Copyright Act (paper nos. 70 and 87); (2) Plaintiffs’ motion and Defendant’s cross-motion for summary judgment on copyright infringement liability (paper nos. 71 and 87); (3) Defendant’s motion and Plaintiffs’ cross-motion for partial summary judgment on misuse and statutory damages (paper nos. 87 and 95); and (4) Plaintiffs’ motions to modify the preliminary injunction (paper nos. 66, 105, and 121). Hearings were held separately on the preliminary injunction and the summary judgment motions. I. Background Plaintiffs CoStar Group, Inc. and CoStar Realty Information, Inc. (collectively CoStar) filed suit against LoopNet, Inc. (Loop-Net) alleging copyright infringement. CoStar is a national provider of commercial real estate information services. It maintains a copyrighted commercial real estate database which includes photographs. Some of the photographs are taken by professional photographers hired by CoStar either as employees or as independent contractors. CoStar licenses users of its database. LoopNet is an internet based company offering a service through which a user, usually a real estate broker, may post a listing of commercial real estate available for lease. The user accesses and fills out a form at LoopNet’s site, with the property name, type, address, square footage, age, description, identifying information, and password. The property is listed once the user submits the form. To include a photograph, however, the user must fill out another form. A photograph, once submitted, is not immediately available to the public. Instead, it is uploaded into a separate “folder,” elsewhere in LoopNet’s system, where it is reviewed by a LoopNet employee to determine that it is in fact a photograph of commercial property and that there is no obvious indication that the photograph was submitted in violation of LoopNet’s terms and conditions. If the photograph meets LoopNet’s criteria, the employee accepts the photograph and it is automatically posted along with the property listing. The listing is then made available to any user upon request. LoopNet does not charge a fee for posting real estate listings or for accessing those listings. In the initial complaint, CoStar claims that over 300 of its copyrighted photographs have appeared on LoopNet’s site (the number has increased over time). CoStar contends that LoopNet is liable for direct or contributory copyright infringement as a matter of law, asserting that there is no material dispute of fact (1) that it owns the copyrights in the photographs; (2) that LoopNet is copying, distributing, and displaying; and/or (3) contributing to the copying, distributing, and displaying of the photographs without authorization. LoopNet’s position on those issues is (1) that CoStar authorized its customers to use the photographs on the internet through the license agreements; (2) that its activities do not constitute direct infringement; and (3) that it is not liable for contributory infringement because it lacked knowledge and did not induce, cause, or materially contribute to the infringing conduct of others. In addition, LoopNet contends that CoStar misused its copyright and that it is entitled to the “safe harbor” protections provided under the Digital Millennium Copyright Act (DMCA) as an “online service provider.” In response to this aspect of their dispute, CoStar contends that Lo-opNet does not qualify as an “online service provider,” does not provide a “web page hosting service,” and is not entitled to the protection of the DMCA because (1) the photographs are stored at the direction of LoopNet rather than its users; (2) its review of the photographs prior to permanent storage disqualifies it from protection; (3) LoopNet has not reasonably implemented a termination policy; (4) it obtains a direct financial benefit from the infringing photographs that appear on its web site; and (5) it has not acted expeditiously to remove infringing material. CoStar contends, and LoopNet agrees, that there is no safe harbor for photographs posted prior to December 8, 1999, the date on which LoopNet appointed an agent to receive notices of infringement. LoopNet also asserts that the copyright act preempts CoStar’s non-copyright claims, and that CoStar’s statutory damages are limited to, at most, 11 (now 13) infringements. II. Standard of Review It is well established that a motion for summary judgment will be granted only if there exists no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In other words, if there clearly exist factual issues “that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party,” then summary judgment is inappropriate. Anderson, 477 U.S. at 250, 106 S.Ct. 2505; see also Pulliam Inv. Co. v. Cameo Properties, 810 F.2d 1282, 1286 (4th Cir.1987); Morrison v. Nissan Motor Co., 601 F.2d 139, 141 (4th Cir.1979); Stevens v. Howard D. Johnson Co., 181 F.2d 390, 394 (4th Cir.1950). The moving party bears the burden of showing that there is no genuine issue as to any material fact. Fed. R. Civ. P. 56(c); Pulliam Inv. Co., 810 F.2d at 1286 (citing Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir.1979)). When ruling on a motion for summary judgment, the court must construe the facts alleged in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Gill v. Rollins Protective Servs. Co., 773 F.2d 592, 595 (4th Cir.1985). A party who bears the burden of proof on a particular claim must factually support each element of his or her claim. “[A] complete failure of proof concerning an essential element ... necessarily renders all other facts immaterial.” Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. Thus, on those issues on which the nonmoving party will have the burden of proof, it is his or her responsibility to confront the motion for summary judgment with an affidavit or other similar evidence. Anderson, 477 U.S. at 256, 106 S.Ct. 2505. In Celotex Corp., the Supreme Court stated: In cases like the instant one, where the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the “pleadings, depositions, answers to interrogatories, and admissions on file.” Such a motion, whether or not accompanied by affidavits, will be “made and supported as provided in this rule,” and Rule 56(e) therefore requires the non-moving party to go beyond the pleadings and by her own affidavits, or by the “depositions, answers to interrogatories, and admissions on file,” designate “specific facts showing that there is a genuine issue for trial.” Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548. However, “ ‘a mere scintilla of evidence is not enough to create a fact issue.’ ” Barwick v. Celotex Corp., 736 F.2d 946, 958-59 (4th Cir.1984) (quoting Seago v. North Carolina Theatres, Inc., 42 F.R.D. 627, 632 (E.D.N.C.1966), aff'd, 388 F.2d 987 (4th Cir.1967)). There must be “sufficient evidence favoring the nonmov-ing party for a jury to return a verdict for that party. If the evidence is merely col-orable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted). III. Analysis Application of copyright law in cyberspace is elusive and perplexing. The world wide web has progressed far faster than the law and, as a result, courts are struggling to catch up. Legislatures and courts endeavor in this growing area to maintain the free flow of information over the internet while still protecting intellectual property rights. The DMCA is one attempt by Congress to strike the proper balance. Understanding the interplay between basic copyright jurisprudence and the DMCA presents an additional challenge for the courts. A. Direct Copyright Infringement A prima facie case of direct infringement consists of proof of ownership of the allegedly infringed material and violation of at least one of the exclusive rights granted to copyright holders under 17 U.S.C. § 106. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.2001). 1. Ownership LoopNet does not contest CoStar’s assertion that it owns, in the first instance, the photographs. Rather, in resisting summary judgment on this threshold issue, LoopNet claims that the license agreements, or some of them, grant the licensees the right to publish the photographs on the internet. Maryland adheres to the law of objective interpretation of contracts and, thus, where the language is clear and unambiguous, the plain meaning is given effect and no further construction is needed. The question of contract interpretation is one of law for the court. Auction & Estate Representatives, Inc. v. Ashton, 354 Md. 333, 731 A.2d 441, 444-45 (1999). LoopNet suggests that the following language grants the licensee permission to upload photographs onto its web site: Licensee may use the Database only for its internal market research purposes and to produce reports for Licensee’s in-house use or for its clients in the course of Licensee’s normal brokerage operations ...; provided however, that Licensee may not generally reproduce or republish all or substantial portions of the Database or Images, without the prior written consent of RIP [predecessor to CoStar], for any other purpose or in any other form ... Licensee may not distribute any Image file in electronic format, except for use in presentation or marketing format for distribution to client. Licensee is explicitly prohibited from publishing or posting CoStar data or compilations based upon CoStar data on, or providing access to CoStar via, the Internet, a public or private bulletin board system or other electronic network, without the express prior written permission of RIG. Paper No. 87, at 13, ex. 18. Assuming the quoted language is in a pertinent agreement, LoopNet’s strained interpretation depends on finding that the use granted in the first sentence broadly grants the right to post the photographs and then that the limitations on Internet use apply to data, and not to images. The contract language itself does not support that interpretation. There is no broad right to use any portion of the database; rather, the licensee’s use is restricted to research, in house reports, and for clients. There is no broad right to use the database for wider, indiscriminate dissemination. Thus, LoopNet’s premise is lacking and it is not necessary to parse the remaining language. 2. LoopNet’s Conduct CoStar asserts that LoopNet directly copies and distributes its photographs on its web site. LoopNet contends, however, by relying on Religious Tech. Center v. Netcom On-Line Communication Servs., Inc., 907 F.Supp. 1361 (N.D.Cal.1995), that it cannot be liable for direct infringement absent “some element of volition or causation.” Paper 87 at 18. LoopNet also argues that it does not “reproduce” CoStar’s photographs on its web site, but rather only allows another to upload or download them. Id. at 23-24. Similarly, LoopNet challenges CoStar’s contention that it directly distributes or displays the photographs. In this case, as in ALS Scan, Inc. v. RemarQ Cmtys., Inc., 239 F.3d 619, 621-22 (4th Cir.2001), there is insufficient basis for a claim of direct infringement: ALS Scan contends first that the district court erred in dismissing its direct copyright infringement claim. It contends that it stated a cause of action for copyright infringement when it alleged (1) the “ownership of valid copyrights,” and (2) RemarQ’s violation of its copyrights “by allowing its members access to newsgroups containing infringing material.” See generally Keeler Brass Co. v. Continental Brass Co., 862 F.2d 1063, 1065 (4th Cir.1988) (describing the requirements of a direct infringement claim). In rejecting ALS Scan’s direct infringement claim, the district court relied on the decision in Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F.Supp. 1361, 1368-73 (N.D.Cal.1995), which concluded that when an Internet provider serves, without human intervention, as a passive conduit for copyrighted material, it is not liable as a direct infringer. The Netcom court reasoned that “it does not make sense to adopt a rule that could lead to liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet.” Id. at 1372. That court observed that it would not be workable to hold “the entire Internet liable for activities that cannot reasonably be deterred.” Id.; see also Marobie-Fl, Inc. v. National Ass’n of Fire and Equipment Distributors, 983 F.Supp. 1167, 1176-79 (N.D.Ill.1997) (agreeing with Netcom’s reasoning). ALS Scan argues, however, that the better reasoned position, contrary to that held in Netcom, is presented in Playboy Enterprises, Inc. v. Frena, 839 F.Supp. 1552, 1555-59 (M.D.Fla.1993), which held a computer bulletin board service provider liable for the copyright infringement when it failed to prevent the placement of plaintiffs copyrighted photographs in its system, despite any proof that the provider had any knowledge of the infringing activities. In the 1995 Netcom decision, Judge Whyte applied pre-DMCA law to the operator of a computer bulletin board service, which gained access to the internet through Netcom, a large internet access provider. The court was careful to distinguish between the system at issue there, where the copying of material was initiated by a third party, from that in MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir.1993), where the defendant itself initiated the creation of temporary copies. It was in that context that the court observed: “Although copyright is a strict liability statute, there should still be some element of volition or causation which is lacking where a defendant’s system is merely used to create a copy by a third party.” 907 F.Supp. at 1370. In ALS Scan, 239 F.3d at 622, the Fourth Circuit resolved the dichotomy as follows: Although we find the Netcom court reasoning more persuasive, the ultimate conclusion on this point is controlled by Congress’ codification of the Netcom principles in Title II of the DMCA. As the House Report for the Act states, The bill distinguishes between direct infringement and secondary liability, treating each separately. This structure is consistent with evolving case law, and appropriate in light of the different legal bases for and policies behind the different forms of liability. As to direct infringement, liability is ruled out for passive, automatic acts engaged in through a technological process initiated by another. Thus the bill essentially codifies the result in the leading and most thoughtful judicial decision to date: Religious Technology Center v. Netcom OnLine Communication Services, Inc., 907 F.Supp. 1361 (N.D.Cal.1995). In doing so, it overrules these aspects of Playboy Enterprises Inc. v. Frena, 839 F.Supp. 1552 (M.D.Fla.1993), insofar as that case suggests that such acts by service providers could constitute direct infringement, and provides certainty that Netcom and its progeny, so far only a few district court cases, will be the law of the land. H.R.Rep. No. 105-551(1), at 11 (1998). Accordingly, we address only ALS Scan’s claims brought under the DMCA itself. Thus, the Fourth Circuit found that Congress had decided the issue, adopting the Netcom approach, which it found more persuasive in any event. CoStar nevertheless continues to urge a finding of direct infringement here, by pointing out that the version of the DCMA actually enacted was NOT the one described in the referenced House Report. Then, it urges the court to adopt the reasoning of the Playboy line of cases instead. The undersigned finds that this case does not present a valid claim of direct copyright infringement. As observed by the Fourth Circuit, the Netcom approach is more persuasive, even if not mandated by the DCMA. Rather, contributory infringement is the proper rubric under which to analyze the case. B. Contributory Copyright Infringement 1. Overview It is, today, a given that: “one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.” Gershwin Publ'g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir.1971); see also Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir.1996). Put differently, liability exists if the defendant engages in “personal conduct that encourages or assists the infringement.” Matthew Bender & Co. v. West Publ'g Co., 158 F.3d 693, 706 (2d Cir.1998). A & M Records, 239 F.3d at 1019. CoStar argues that LoopNet is liable because of its own conduct in operating the system, and not merely because it made technology available that others might use to infringe. According to CoStar, once it gave notice of specific alleged infringements to LoopNet, LoopNet had knowledge of ongoing infringements by its users. CoStar asserts that this knowledge, coupled with the lack of more drastic measures to prevent infringement, constitutes inducement and so renders LoopNet liable for contributory infringement. CoStar attempts to distinguish this case from Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984), where the mere provision of means, capable of substantial non-infringing uses, was not a basis for contributory infringement. Instead, CoStar seeks to bring the current case under the analysis in Fonovisa v. Cherry Auction, 76 F.3d 259, 264 (9th Cir.1996) (holding that the knowing provision of swap meet facilities necessary to the sale and distribution of infringing works was a “material contribution” to the infringement of others) and A & M Records v. Napster, 239 F.3d 1004, 1020 (9th Cir.2001) (distinguishing Sony on the basis of Napster’s “actual, specific knowledge” of direct infringement). The difference between Sony, in which the court found no contributory infringement, and Fonovisa and its ilk, where it did, is a matter of time frame and the retention of some control by the party providing facilities. In Sony, the only connection between Sony and the potential direct infringers was at the point of sale, after which Sony had no control over the use of its Betamax. In contrast, in Fono-visa, the operators of the swap meet not only rented the premises, but provided other facilities. Furthermore, they continued to retain control over the facilities and were in a position to deny access once they had actual knowledge of infringement. Fonovisa, 76 F.3d at 264. The court in Napster picked up on this and found that Napster had actual knowledge of specific infringements by its users, Napster, 239 F.3d at 1020, whereas in Sony, it was a matter of imputing knowledge of possible infringements. Although fact issues precluded summary judgment on contributory infringement in Netcom, that case supports this characterization of the difference between Fonovisa and Sony because the court held that the time to assess infringement was when the services were provided, not when the parties entered into an agreement. Netcom, 907 F.Supp. at 1373, 1374. Thus, CoStar seeks to analogize LoopNet’s role vis á vis the infringements to that of the swap meet operator in Fonovisa, where ongoing services were provided and in which the operators had actual or constructive knowledge of direct infringements. LoopNet, in turn, contends that is not liable for contributory infringement because (1) it had no knowledge of the infringement prior to notice from CoStar and (2) it has not induced, caused, or materially contributed to the infringing conduct of its users because it discontinued access to the infringing material immediately upon discovery. It asserts that its policy for removal of infringing material and of denying access to repeat infringers is sufficient to avoid liability because its conduct does not rise to the level of inducement. In addition, LoopNet argues that, for any infringements occurring after December 8, 1999, it is protected from liability in damages for contributory infringement by the DMCA’s safe harbor for online service providers (OSP’s). The DMCA was enacted to strike a new balance between the viable operations of OSP’s and the need to enforce copyright protection. It shields service providers from damages unless they have knowledge of infringement by users or are notified by copyright owners of alleged infringements. The liability shield remains, however, only as long as the service provider follows the Act’s “take down” provisions and expeditiously removes or blocks access to infringing (or allegedly infringing) material. LoopNet contends that it is protected by the safe harbor, that it maintains an adequate policy for the termination of repeat offenders, and that, once notified by CoStar of alleged infringements, it complied sufficiently with the “take down” provisions to remain shielded from liability. CoStar, on the other hand, maintains that LoopNet is not protected by the safe harbor and that, even if it is, its removal procedures do not satisfy the “take down” requirements for staying within the safe harbor once it has knowledge of actual or potential infringements. CoStar does not claim that LoopNet had knowledge of its users’ infringements prior to its giving notice. Paper no. 71, at 26. In Netcom, the court found that Netcom was unable to screen out the allegedly infringing postings before they were made and that there was a factual dispute over whether Netcom had knowledge apart from that gained when it received notice of specific infringements from the plaintiff. Netcom, 907 F.Supp. at 1374. Given the nature of the infringements in this case, it was impossible for LoopNet to have knowledge of the alleged infringement before receiving notice from CoStar. CoStar does not attach a copyright notice to its photos and even CoStar’s own expert could not identify a CoStar photo simply by reviewing it. Paper no. 87, at 26, Ex. 20. Additionally, prior to receiving notice from CoStar, LoopNet did not have knowledge about the status of CoStar’s licensing agreements with its clients. Although exceeding the scope of a license constitutes copyright infringement (see Tasini v. New York Times Co., 206 F.3d 161, 170 (2d Cir.2000)), even if LoopNet suspected that some photographs posted on its site were copyrighted, as with the user’s fair use claim in Netcom, there was no way for LoopNet to know whether the copyright owners’ licensing agreements would allow the photographs to be used in such a way. In the case of a service provider, knowledge giving rise to liability only exists when there is no colorable claim of users’ noninfringment. Netcom, 907 F.Supp. at 1374. Thus, LoopNet cannot be charged with any form of knowledge before receiving claims of infringement from CoStar. Although CoStar does not claim that LoopNet had knowledge of infringement prior to receiving notice from CoStar, there remain factual disputes about the type of knowledge with which it can be charged after receiving the claims of infringement. CoStar alleges that once it gave LoopNet notice that its photographs were being infringed, LoopNet can be charged with knowledge of continuing infringements. Additionally, there is a dispute over whether LoopNet’s policies to deter infringement, remove infringing works, and prevent repeat infringement were inadequate. CoStar claims that if, as it asserts, those policies were not adequate, LoopNet can be found to have induced or materially contributed to continuing infringements by its users of which, CoStar argues, it had knowledge. The existence of the safe harbor eonvo-lutes the analysis of copyright infringement which, theoretically, should proceed in a straight line. Ideally, CoStar would have to make a prim a facie showing that LoopNet was liable of contributory infringement and then the court would turn to the question of whether the “safe harbor” provided a defense. However, because the parameters of the liability protection provided by the “safe harbor” are not contiguous with the bounds of liability for contributory infringement, the analysis may proceed more efficiently if issues are decided a bit out of order. On summary judgment, it is often appropriate for a court to decide issues out of the traditional order because a dispute of fact is only material if it can affect the outcome of a proceeding. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Thus, to the extent, if at all, that LoopNet is entitled to summary judgment in its safe harbor defense, all other issues concerning damages liability for contributory infringement would be rendered immaterial. 2. The Digital Millennium Copyright Act The court now turns to its analysis of LoopNet’s status under the DMCA and whether it remains in the safe harbor provided by that act with regard to damages for infringements occurring after December 8,1999. In 1998, Congress enacted the DMCA. Title II of the Act, the Online Copyright Infringement Liability Limitation Act, is codified at 17 U.S.C. § 512. It provides, in part, that: (c) Information residing on systems or networks at direction of users.— (1) In general.-A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider- (A)(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing; (ii) in the absence of such actual knowledge, is not aware of the facts or circumstances from which infringing activity is apparent; (iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material; (B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and (C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity. 17 U.S.C. § 512(c)(1) (1998). The service provider must also designate an agent to receive notifications. 17 U.S.C. § 512(c)(2) (1998). As a relatively recently enacted statute, there is little interpretative case law, although there is a growing body of commentary and reports. Amy P. Bunk, J.D., Validity, Construction and Application of Digital Millennium Copyright Act, 2001 WL 219429, 2001 A.L.R. Fed. 2 (2001) (unpublished annotation); see also Alfred C. Yen, Internet Service Provider Liability for Subscriber Copyright Infringement, Enterprise Liability, and the First Amendment, 88 Geo.L.J. 1833 (2000). To the extent that the statutory language may be unclear, the legislative history of the DMCA can be useful in fleshing out its meaning given the paucity of precedent interpreting the statute. Congress has traditionally defined the scope of copyright protections: Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably complicated by such new technology. Sony, 464 U.S. at 431, 104 S.Ct. 774. In light of the courts’ traditional deference to Congress and the lack of precedent interpreting the Digital Millennium Copyright Act, it is appropriate to turn to the legislative history of that act, as well as precedent, in order to define the relationship between contributory infringement and the safe harbor provisions of the Act. The Fourth Circuit has decided one case dealing with the relationship of the DMCA and contributory infringement: ALS Scan, 239 F.3d at 625, citing H.R.Rep. No. 105-796, at 72 (1998): The DMCA was enacted both to preserve copyright enforcement in the Internet and to provide immunity to service providers from copyright infringement liability for “passive,” “automatic” actions in which a service provider’s system engages through a technological process initiated by another without the knowledge of the service provider.... The DMCA’s protection of an innocent service provider disappears at the moment the service provider loses its innocence, i.e., at the moment it becomes aware that a third party is using its system to infringe. At that point, the Act shifts responsibility to the service provider to disable the infringing matter, “pre-serv[ing] the strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment.” The DMCA seeks to strike a balance by shielding online service providers from liability in damages as long as they remove or prevent access to infringing material. The initial inquiry is whether LoopNet can be considered a service provider for the purposes of the DMCA. a. Service Provider In order to qualify for the safe harbor in the DMCA, LoopNet must meet the definition of “online service provider.” Under § 512(k)(1)(A), a service provider is “an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received.” 17 U.S.C. § 512(k)(1)(A) (1998). For the other safe harbor provisions, including (c), which is at issue here, the definition is broader: “a provider of online services or network access, or the operator of facilities therefor.” Id. at (B). CoStar challenges LoopNet’s ability to qualify as a service provider, contending that LoopNet is not a web page hosting service limited to the “provision of Internet infrastructure.” Paper no. 96, at 12. LoopNet contends that it is a web page hosting service, but also, more generally, that it falls within the Act’s broad definition of “online service provider.” Paper no. 87, at 35. Statutory interpretation principles direct the court to consider, first, the plain language of the statute. If there is no ambiguity, then no resort to extrinsic aids is appropriate. A court must harmonize all portions of a statute, and not read any single provision out of context. “The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which the language is used, and the broader context of the statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997), citing Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 477, 112 S.Ct. 2589, 120 L.Ed.2d 379 (1992). It is not necessary to decide, at this time, just how far the definition of “online service provider” extends. CoStar turns to the legislative history of the DMCA for support for its proposed limitation of the term “online service provider,” but that limitation is simply not commensurate with the language of the act. “The Act defines a service provider broadly.” ALS Scan, 239 F.3d at 623. In ALS Scan, neither party suggested that RemarQ was not a service provider under that definition. In another recent case, it was also undisputed that internet auction site eBay “clearly meets the DMCA’s broad definition of online ‘service provider.’ ” Hendrickson v. Ebay Inc., 165 F.Supp.2d 1082, 1088 (C.D.Cal.2001). Therefore, it is simply not possible to read the definition of service provider as narrowly or as technically restrictive as CoStar would have it. “Online services” is surely broad enough to encompass the type of service provided by Loop-Net that is at issue here. The term is, of course, only a threshold to the protections of the Act. Even if LoopNet qualifies as a service provider, it must meet the other criteria. b. Stored at the instance of the user A service provider is only protected from liability by the DMCA, “for infringement of copyright by reason of its storage at the direction of a user of material.” 17 U.S.C. § 512(c)(1). The legislative history indicates that this does not include material “that resides on the system or network operated by or for the service provider through its own acts or decisions and not at the direction of a user.” H.R.Rep. No. 105-551, at 53 (1998). CoStar argues that photographs are uploaded to the site only after review and selection by LoopNet and so they are not stored at the instance of the user. However, that is a mischaracterization of the process by which the photographs are uploaded. They are uploaded at the volition of the user and are subject, not to a review and selection process, but to a mere screening to assess whether they are commercial property and to catch any obvious infringements. Paper no. 87, at 52. Although humans are involved rather than mere technology, they serve only as a gateway and are not involved in a selection process. See supra note 6. The ability to remove or block access to materials cannot mean that those materials are not stored at the user’s discretion or it would render the DMCA internally illogical. The “take down” procedures of § 512 mandate that the service provider remove or block access to materials in order to stay in the safe harbor. It would be inconsistent, then, if in order to get into the safe harbor, the provider needed to lack the control to remove or block access. See Hendrickson, 165 F.Supp.2d at 1092 (making analogous argument regarding the standard for direct financial benefit in § 512(c)(1)(B)), see also infra note 9. Therefore, this threshold requirement is met and LoopNet is not disqualified from the safe harbor on these grounds. c. Knowledge The safe harbor protects service providers from liability unless they have knowledge of copyright infringement. There are three types of knowledge of infringement that can take a service provider out of the safe harbor: (1) the service provider can have actual knowledge of infringement; (2) it can be aware of facts which raise a “red flag” that its users are infringing; or (3) the copyright owner can notify the service provider in a manner “substantially” conforming with § 512(c)(3) that its works are being infringed. See H.R.Rep. No. 105-551, Part 2, at 53 (describing the “red flag” test). The service provider does not automatically lose its liability shield upon receiving notice, but “the Act shifts responsibility to the service provider to disable the infringing matter...” ALS Scan, 239 F.3d at 625. The question at this stage of the analysis is whether LoopNet had sufficient knowledge of its users’ copyright infringement to trigger the “take down” provisions of the DMCA. If sufficient knowledge is established, then the analysis shifts to whether LoopNet complied with the language of the DMCA’s “take down” provisions. Although different DMCA sub-sections control “take down” procedures for actual or “red flag” knowledge than those necessitated when the service provider receives notification of a claimed infringement, the language of both sub-sections is the same: whether the service provider acted, “expeditiously to remove, or disable access to, the material,” so as to stay in the safe harbor. 17 U.S.C. § 512(c)(1)(A.)(iii) or § 512(c)(1)(C). If Lo-opNet did not adequately remove or block access to the claimed infringing material, it loses its DMCA liability shield, but is not necessarily liable for contributory infringement. As will be seen, proof that LoopNet had knowledge of and induced the infringements are necessary elements of CoStar’s contributory infringement claim. These elements are slightly different from those applicable to LoopNet’s safe harbor defense and so require a separate determination if LoopNet fails to remain in the safe harbor. LoopNet has not challenged the sufficiency of CoStar’s notification of claimed infringement. Furthermore, under Fourth Circuit law, notice is adequate to trigger the safe harbor “take down” protocols when it “substantially complies with the notification requirements” of § 512(c)(3)(A). ALS Scan, 239 F.3d at 625. Therefore, LoopNet received notification of claimed infringement that complies with § 512(c)(3)(A) and so the adequacy of LoopNet’s removal policy must be assessed to determine whether Loop-Net is protected by the safe harbor. d. Adequacy of Termination and “Take Down” Policy Once a service provider has received notification of a claimed infringement as described in § 512(c)(3), the service provider can remain in the safe harbor if it “responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.” 17 U.S.C. § 512(c)(1)(C) (1998). CoStar claims that LoopNet has not acted expeditiously or effectively in removing infringing material once it has received notification and so has not satisfied § 512(c)(1)(C). Furthermore, there is a related, though not identical, requirement that limitations on liability only apply to a service provider if that provider: has adopted and reasonably implemented, and informs subscribers and account holders of the service provider’s system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers. 17 U.S.C § 512(i)(1)(A) (1998). This requirement is designed so that flagrant repeat infringers, who “abuse their access to the Internet through disrespect for the intellectual property rights of others should know there is a realistic threat of losing.. .access.” H.R.Rep. No. 105-551, Part 2, at 61. CoStar argues that Loop-Net has not adopted and reasonably implemented a policy and so should lose its liability shield according to § 512(i)(l). Although the satisfaction of each of these provisions have different requirements, they each turn on similar factual determinations. With respect to each, there are material factual disputes that preclude summary judgment. In making its claim that LoopNet’s “take down” of infringing material following notification was inadequate, CoStar points to LoopNet’s failure to remove several photographs after being notified by CoStar that they were infringing and claims that several photographs have been posted more than once after notification. Paper no. 96, at 34. In attacking Loop-Net’s termination policy for repeat infring-ers, CoStar asserts that there is no evidence that LoopNet has ever terminated any user’s access despite the fact that some of them have an extensive history as repeat infringers. Paper no. 70, at 29, 20, ex.5, 23. LoopNet argues in contrast that § 512(i)(l)(A) does not require that it terminate access, but that it reasonably implement a policy for termination of repeat infringers in appropriate circumstances. Paper no. 87, at 45. LoopNet’s policy includes “Terms and Conditions” that include the removal of listings alleged to have infringed copyrights, the possibility of additional evidence demonstrating compliance with the noninfringement policy for repeat infringers, and the possibility of termination. Id. at 45, ex. 7. In addition, LoopNet claims that it promptly removes photographs once it receives notice of alleged infringement, sends an e-mail to brokers explaining the potential consequences of repeat infringement and investigates brokers it suspects to be repeat infringers. Id. at 46, ex.16, 2, 3. Specifically, LoopNet challenges the designation by CoStar of certain brokers as repeat infringers and claims that it has limited the access of some brokers. Id. at 47-49, ex. 2, 3, 24. Finally, LoopNet counters CoStar’s assertion that it has not acted expeditiously to remove allegedly infringing photographs in compliance with § 512(c)(1)(C) when it receives notice and claims to have implemented additional precautions to avoid re-posting of infringing photographs in the future. Id. at 56, ex. 2. There are several material factual disputes remaining as to whether the removal of allegedly infringing photographs was satisfactorily expeditious and whether Lo-opNet’s termination policy was reasonable and effective. CoStar’s infringement claims are based on the posting of specific photographs. Additionally, LoopNet’s knowledge of the alleged infringements and its “take down” and termination policies have changed over time in fairly significant ways. In order to resolve this issue, the factfinder will have to focus on each photo and the policy in effect prior to the posting of each photo. Hence, neither party is entitled to summary judgment on this issue. e. Direct financial benefit CoStar argues that LoopNet does not qualify for the safe harbor because it obtains a direct financial benefit from the infringing photographs that appear on its website. Paper no. 96, at 30. Regardless of whether LoopNet complied with the “take down” requirements, a finding that it received a direct financial benefit from the infringement automatically would remove it from the safe harbor. To stay in the safe harbor, LoopNet has to show that it “does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” 17 U.S.C. § 512(c)(1)(B) (1998). Basically, the DMCA provides no safe harbor for vicarious infringement because it codifies both elements of vicarious liability. 3 Melville B. Nimmer and David Nimmer, Nimmmer on Copyright, § 12B.04[A][2], at 12B-38 (2001). LoopNet meets neither element of this test. CoStar does not assert that Loop-Net has any right to control its users beyond merely the ability to control or block access to its site. As such, LoopNet does not have the “right and ability” to control its users commensurate with the standard for vicarious infringement. “[T]he ‘right and ability to control’ the infringing activity, as the concept is used in the DMCA, cannot simply mean the ability of a service provider to remove or block access to materials posted on its website or stored in its system.” Hen-drickson, 2001 WL 1078981 at *9, — F.Supp.2d at-. Furthermore, LoopNet does not meet the other element for direct financial benefit. LoopNet does not charge a fee for posting any real estate listing, with or without a photograph. While CoStar correctly asserts that the legislative history of the DMCA supports the use of a commonsense rather than a formalistic approach, that same Senate Report stated that it would not be a considered a direct financial benefit “where the infringer makes the same kind of payment as non-infringing users of the provider’s service.” H.R.Rep. No. 105-551, Part 2, at 54. In this case, neither infringing or non-infringing users made any kind of payment. CoStar attempts to bolster its argument for a broader conception of benefit by relying on Playboy Ent. v. Russ Hardenburgh, Inc., 982 F.Supp. 503 (N.D.Oh.1997). In that case, the defendant operator of an electronic bulletin board (BBS) was found liable for contributory infringement when it encouraged subscribers to upload photographs and benefitted indirectly from having more files available to customers. Hardenburgh was based in part on Fono-visa, in which “contributory liability could attach where ‘infringing performances enhance the attractiveness of the venue to potential customers.’ ” Hardenburgh, 982 F.Supp. at 514, citing Fonovisa, 76 F.3d at 263. However, that assessment of a benefit to the defendant was not for the purposes of § 512(c)(1)(B) of the DMCA, but rather was a part of the court’s determination that the defendant met the standard for contributory infringement. Both the language and the purpose of the test for direct financial benefit are different from the test for contributory infringement. Whereas in Playboy and Fonovisa, the finding of added value to the defendant was evidence that the defendant induced the infringement, for the purposes of the DMCA, the financial benefit must be “directly attributable to the infringing activity.” 17 U.S.C. § 512(c)(1)(B) (1998). CoStar might make an argument that the indirect type of benefit cited in Harden-burgh is also present here. However, such a benefit does not fit within the plain language of the statute. Accordingly, § 512(c)(1)(B) does not present a barrier to LoopNet remaining in the safe harbor. 3. Liability for Contributory Infringement With regard to the photographs that were infringed before the safe harbor applied, and in case LoopNet’s termination policy and take down of infringing photographs is found to be inadequate so as to remove it from the safe harbor, the analysis shifts from the DMCA back to contributory infringement. The determination of contributory infringement liability turns on a different issue of knowledge than the standard used to determine LoopNet’s eligibility for the safe harbor. Here, the question is whether CoStar’s notice of claimed infringement was sufficient to satisfy the knowledge prong of the test for contributory infringement either by providing actual knowledge, a “red flag” that infringement was occurring, or constructive knowledge. Additionally, to prevail on its claim for contributory infringement, CoStar must prove that LoopNet induced, caused or materially contributed to the infringement. Gershwin, 443 F.2d at 1162. It is necessary to assess this claim along two dimensions. The first is whether notice by CoStar to LoopNet satisfies the knowledge prong of the test for contributory infringement. More specifically, there are questions as to the scope of the notice given and the corresponding scope of knowledge. CoStar alleges that once it gave LoopNet notice of specific infringements, LoopNet was on notice that ongoing infringements were occurring and had a duty to prevent repeat infringements. LoopNet does not deny that it was on notice that specific photographs were allegedly infringed, but asserts that it cannot be charged with imputed knowledge of future infringements. This first dimension of knowledge flows into the second assessment, determining whether inducement occurred. There is a critical interplay between the level of knowledge possessed by LoopNet as a result of CoStar’s notices and the amount of policing, deterrence and removal demanded of LoopNet to avoid being liable for contributory infringement. If CoStar’s notice to LoopNet gave Loop-Net a broad scope of knowledge that infringements were occurring, then it creates a high level of policing necessary by LoopNet to avoid inducing infringement. The issue of the adequacy of LoopNet’s removal policy is different at this stage than it was when assessing its adequacy for the purposes of the DMCA safe harbor. In the safe harbor context, the removal policy had adequately to remove infringing or allegedly infringing material. If Loop-Net met the standard following notice it was shielded from damages liability by the safe harbor. In the context of assessing liability for contributory infringement, the question is not whether LoopNet adequately removed the infringing material, but whether, at some point, it created an inducement to put infringing material up on the site. CoStar argues that the fact that it gave LoopNet notice meant that when LoopNet, as it alleges, did not adequately police infringement and create disincentives to infringing, it actually induced the infringing. Therefore, it argues, LoopNet is liable because it had knowledge of infringement and induced the in-fringers to use its site. See Gershwin, 443 F.2d at 1162. While liability for contributory infringement can be based on “merely providing the means for infringement,” Fonovisa, 76 F.3d at 264, citing 2 William F. Patry, Copyright Law & Practice 1147, merely providing means is not always sufficient to prove infringement. CoStar is correct that its claims for contributory infringement against LoopNet are not analogous to Sony, in which the court found that the mere provision of means was an insufficient basis for contributory infringement when those means were capable of substantial noninfringing use. In Sony, the only connection between Sony and the direct infringers was at the point of sale; Sony retained no access control similar to that of a service provider. Furthermore, the Betamax buyers were capable of potential infringements, but, at the time of the sale, Sony could not have notice of any actual infringements because they did not yet exist. In the current case, unlike Sony, LoopNet maintained control over access to the site and could deny access or block materials after gaining knowledge of infringement. It is unclear, however, when and to what extent LoopNet gained knowledge of infringement. Instead, CoStar seeks to draw comparisons between the current case and Fonovi-sa, in which the owner of a swap meet who provided support services and took rental payments materially contributed to the underlying infringing activity. There was no question in that case that the swap meet owner had actual knowledge of the infringements. Fonovisa differs from Sony in the time frame involved; the owner had continued control over access to the swap meet, provided ongoing support through the use of facilities and knew of actual infringements, but did not block access. See Fonovisa, 76 F.3d at 264. CoStar also draws comparisons between the current case and Sega Enters. LTD. v. MPHIA, 948 F.Supp. 923 (N.D.Cal.1996). In Sega, the operator of a BBS was found liable for contributory infringement of copyrighted video games when he knew users were uploading and copying games, provided the site and facilities for the infringing conduct, actively solicited users to upload games and highlighted the location of unauthorized games on his site. Sega, 948 F.Supp. at 933. While LoopNet’s continued control over access to its site is more similar to that of the BBS operator in Sega or the swap meet owner in Fonovisa than to the mere seller of goods in Sony, there are elements of knowledge in those cases which the court is not satisfied have been proven here. The current case seems more factually similar to Netcom, in which the court held that when a BBS operator could not “reasonably verify a claim of infringement” because it was beyond the ability of a BBS operator quickly and fairly to determine the validity of the user’s fair use claim, the operator’s lack of knowledge was reasonable. Netcom, 907 F.Supp. at 1374. In Netcom, the court found that a triable issue of fact existed with respect to the degree of knowledge Netcom possessed about its subscriber’s infringement where the subscriber had “at least a colorable claim” of noninfringement. Netcom, 907 F.Supp. at 1374. As in Netcom, the situation in the current case resides in that gray middle range of cases in which the service provider has information suggesting, but not conclusively demonstrating, that subscribers committed infringement. See Yen, supra, at 1875 (stating that Net-com holds that knowledge is necessary for contributory liability). In the analysis of LoopNet’s safe harbor defense to liability, mere notification of claimed infringement by CoStar was enough to trigger one of two scenarios. Either LoopNet could comply with the “take-down” provisions of the DMCA and remain in the safe harbor or refuse to remove the allegedly infringing material and expose itself to the choppier waters of contributory infringement liability. However, that notification did not automatically equate to knowledge for the purpose of assessing liability. Netcom stands for the proposition that the bare claim of infringement by a copyright holder does not necessarily give rise to knowledge of an infringement. CoStar needs to prove not only that LoopNet had knowledge of the infringements by its users, but that, as it asserts, LoopNet’s alleged failure effectively to remove infringing photographs and dissuade infringers at some point began to comprise inducement or material contribution. In Hardenburgh and Sega, BBS operators not only had actual knowledge of its users’ infringement, but encouraged subscribers to upload infringing works. While Napster and Fonovisa did not require actual encouragement of infringement, in both cases the defendant had actual, specific knowledge of infringements and continued to provide support and facilities to infring-ers. Thus, in order to prove its claim, CoStar needs to establish that the notice it gave to LoopNet comprised at least constructive knowledge of specific infringing activity which LoopNet materially contributed to or induced by its alleged failure to halt the activity. There remain too many material factual disputes for the court to decide on summary judgment either that such a level of knowledge did or did not exist or that LoopNet’s actions in trying to stop the infringement were or were not insufficient to the point of comprising inducement as a matter of law. Again, CoStar has alleged the infringement of specific photographs posted at different times. Over the same time, LoopNet’s knowledge of the alleged infringements and policies regarding removal and termination have shifted significantly. As a result, the fact-finder must determine along a continuum the adequacy of the policy in place prior to the posting of each specific photograph. Therefore, neither party is entitled to summary judgment on this issue. C. Misuse LoopNet argues that CoStar misused its copyrights by extending them beyond their intended reach to limit its licensees from distributing the 'entire database, including data and photographs in which it has no copyright. Paper no. 87, at 31, 32. Misuse of copyright is an affirmative defense to a claim of copyright infringement. The misuse defense, which is rarely asserted, stems from an analogous misuse of patent defense recognized by the Supreme Court in Morton Salt Co. v. G.S. Suppiger, 314 U.S. 488, 62 S.Ct. 402, 86 L.Ed. 363 (1942), and was adapted to copyright in Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 973-74 (4th Cir.1990). Basically, this defense is an assertion that the copyright holder is using his copyright, “to secure an exclusive right or limited monopoly not granted by the [Copyright] Office and which it is contrary to public policy to grant.” Id. at 977, citing Morton Salt, 314 U.S. at 492, 62 S.Ct. 402. Although misuse is a claim of anticom-petitive behavior, Lasercomb distinguished misuse from an antitrust violation when it held that: a misuse need not be a violation of antitrust law in order to comprise an equitable defense to an infringement action. The question is not whether the copyright is being used in a manner violative of antitrust law ... but whether the copyright is being used in a manner violative of the public policy embodied in the grant of a copyright. Lasercomb, 911 F.2d at 978. In Laser-comb, the Fourth Circuit examined plaintiffs use of anticompetitive language in its licensing agreements to determine whether the language was adverse to the public policy embodied in copyright law. It found that “[t]he misuse arises from Las-ercomb’s attempt to use its copyright in a particular expression, the Interact software, to control competition in an area outside the copyright, i.e., the idea of computer-assisted die manufacture, regardless of whether such conduct amounts to an antitrust violation.” Id. at 979. Despite the fact that conduct need not rise to the level of an antitrust violation to constitute misuse, the Fourth Circuit has been hesitant to find misuse. For example, in Service & Training, Inc. v. Data General Corp., 963 F.2d 680, 690 (4th Cir.1992), the court rejected the appellant’s effort to establish copyright misuse where appellant failed to establish that appellee did anything more than limit the use of its software to the repair and maintenance of specific computer hardware. Such activity, it held, was protected as an exclusive right of a copyright owner. The gravamen of LoopNet’s misuse claim is that CoStar seeks to restrict licensees from distributing photographs and data over which, by its own admission, it has no claim of ownership. Paper no. 87, at 32. However, this case bears little similarity to Lasercomb, where the software licensing agreement in question precluded the development of even non-infringing software. The establishment of this defense depends on a determination that the holder of a copyright is using that copyright in an anticompetitive manner against the public policy behind copyright. One case relied upon by Loop-Net, qad., inc. v. ALN Assocs., Inc., 770 F.Supp. 1261 (N.D.Ill.1991), demonstrates that the misuse defense is only applied in situations that are sufficiently abusive of copyright’s grant of exclusivity. LoopNet seeks to compare CoStar’s use of its licensing agreement to the plaintiffs attempt in qad. to restrain the defendant’s use of material over which it held no copyright. In that case, however, the plaintiff deceived the court over the copyrighted and uncopyrighted elements of its software and, “further used that confusion to wield the heavy sword of litigation under the guise of legitimate copyright enforcement in areas in which it had no rights.” Id. at 1267, n. 17. In this case, there is no allegation that CoStar has misled the court over the scope of its copyrights. Furthermore, there is no allegation of tying or abuse of copyright serious enough to offend the public policy behind copyright and rise to the level of misuse. Accordingly, LoopNet’s defense of copyright misuse is rejected. D. Statutory Damages LoopNet contends that, even if CoStar can establish infringement, it may, as a matter of law, recover no more than 11 statutory damage awards, corresponding to each of the then 11 (now 13) copyright registrations on which CoStar registered its photograph copyrights. Paper no. 87, at 62, 63. In contrast, CoStar contends that each of its 348 photographs constitutes a separate work and, therefore, it is entitled to 348 separate statutory damage awards should the court find infringement. Paper no 94, at 25. 17 U.S.C. § 504(c)(1) states, in relevant part: the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually. .. in a sum of not less than $500 or more than $20,000, as the court considers just. For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work. 17 U.S.C. § 504(c)(1) (1996). Each side agrees that the number of statutory damage awards should be determined on summary judgment, so both parties have moved for summary judgment on this issue. The court’s determination of the correct number of statutory damage awards will depend on what constitutes a “work” for the purposes of § 504(c)(1) and, more particularl